Solving the CAPEX Problem: Stop Investing. Make Better Decisions.

Companies rarely lack investment ideas.

They have too many.

New production facilities. Automation. Digitalization. Energy efficiency. Maintenance. Capacity expansions. New locations. IT infrastructure. Transformation.

Every single project can make sense.

That’s why the real CAPEX problem doesn’t start with the question:

“Which project is good?”

But rather with the question:

“Which combination of our projects generates the greatest economic benefit with the available capital?”

This is precisely where the task changes fundamentally.

Table of Contents

• CAPEX Is an Allocation Problem
• The problem is the combination
• From Project Ranking to the Optimal Portfolio
• And then reality sets in
• From Reporting to the Decision-Making Space
• The existing systems remain in place
• That’s why the CAPEX problem is often not a budget problem

CAPEX is an allocation problem

Suppose a company has 100 potential investment projects.

Information is available for each project:

Investment amount
Expected economic contribution
Resource requirements
Time frame
Strategic relevance
Dependencies
Risks and constraints

However, the budget is only sufficient for a portion of these projects.

The traditional approach often involves evaluating projects individually, prioritizing them, and then ranking them.

But a ranking does not automatically answer the crucial question.

After all, the best individual project does not necessarily lead to the best overall portfolio.

Project A may be excellent when viewed in isolation. But perhaps projects B, C, and D, when combined with the same capital, generate a higher overall value.

CAPEX optimization is therefore not merely a matter of prioritization.

It is a combinatorial optimization problem.

The problem is the combination

As the number of possible projects increases, the decision space grows exponentially.

With N projects, there are theoretically up to:

^2N possible project combinations.

With 20 projects, that’s already more than a million combinations.

With 50 projects, there are more than a quadrillion.

With 100 projects, the theoretical decision space becomes so large that manually considering all possibilities is practically impossible.

People are excellent at evaluating projects.

What humans cannot do is systematically calculate an exponentially growing decision space.

That is exactly what mathematical optimization is for.

From Project Ranking to the Optimal Portfolio

With StratePlan, we therefore do not view CAPEX primarily as a ranking problem.

We view it as a portfolio decision.

The input data can be surprisingly minimal:

Investment → economic benefit → constraints → dependencies

Based on this, StratePlan calculates various permissible combinations and searches for the portfolio composition that best fulfills the defined business objective within the existing constraints.

Management thus receives not just a list of prioritized projects.

It receives a mathematically calculated decision space.

And then reality sets in

However, a CAPEX decision does not end with a calculation.

New questions arise in the boardroom:

“What happens if we reduce the budget by 10 million euros?”

“Which projects do we have to postpone?”

“What happens if this plant absolutely has to be included?”

“How will the portfolio change if Project 27 is canceled?”

“What do we get for an additional 5 million euros in CAPEX?”

“Which combination maximizes our contribution to earnings?”

In traditional processes, questions like these often lead to new analyses, rounds of Excel spreadsheets, and coordination meetings.

The decision is postponed.

This is precisely the problem we aim to solve with the CAPEX Live Boardroom Simulation.

From Reporting to the Decision-Making Room

StratePlan can recalculate based on changed assumptions and constraints within seconds.

This transforms the board meeting.

From:

Question → Analysis request → New calculation → Next meeting

becomes:

Question → Calculation → Comparison → Decision

all within the same meeting.

For us, this is the key point of Decision Intelligence.

Don’t produce more data.

Don’t build even more dashboards.

Instead, use existing data to make better decisions.

Existing systems remain in place

StratePlan is not intended to replace ERP, finance, or PPM systems.

These systems provide the data and map out processes.

StratePlan operates at the decision-making level above them.

SAP, Microsoft, Oracle, IFS, or existing Excel and database structures can continue to form the operational data foundation.

Optimization answers a different question:

What should we do with the existing opportunities and available capital?

This transforms data into a concrete capital allocation decision.

The CAPEX problem is therefore often not a budget problem

When capital becomes scarcer, the first reaction is often:

Where can we cut back?

The more strategically interesting question is:

Which combination of our investments will generate the maximum possible enterprise value with this budget?

That is a fundamental difference.

After all, before a company invests more, it should know whether its existing capital is already optimally allocated.

In our view, this is precisely where one of the greatest, as yet untapped, performance levers in CAPEX management lies.

Same projects. Same budget. Better combination. Better result.

Don’t take our word for it. Do the math.